Microcredit : “It’s a gift that gives twice,” explained Bernard Kervyn, founder of Mekong Plus, the non-profit and community development organisation that has spent more than two decades improving the lives of thousands in the Mekong Delta region.
Indeed, help comes in many forms, but to Bernard, the best form of assistance is one that spontaneously sparks more beneficiaries without further intervention.
Mekong Plus’ Microcredit changes lives of the underprivileged in Indochina
Bernard’s first exposure to microcredit as a strategy to turn around the lives of the underprivileged came from first-hand experience during his ten years as a social worker in Bangladesh where the Grameen Bank founded by Muhammad Yunus begin offering small loans to villagers during the 1980s; amounts that are often considered insignificant and ironically high-risk to mainstream banks.
“The minimum amount at most banks in Vietnam is about VND10,000,000,” Bernard explained.
As a result, many of the poor resort to borrowing from pawnshops; often schemes coupled with high interest rates. This and other factors made Bernard and his team at Mekong Plus commit to offer microcredit to locals.
“We don’t give the loan to get refunded! The purpose is to defeat poverty,” Bernard exclaimed while reminding that the refund rate is in fact more than 99.9%.
An example is the family of Madam Xiêu from Ninh Phước District, Ninh Thuận province, one of the poorest areas of Vietnam’s central coastal region. With moneylenders demanding 10% interest a month, the €110 microloan from Mekong Plus freed her from the burden of repayment, allowing her to save an additional €10 a month. An amount seemingly small from the lens of the developed world, the additional cash goes into invaluable repairs on her home.
As a general guideline, Mekong Plus keeps microloans interest free for the first three years. After that, a transitional period begins when beneficiaries of the scheme begin paying low interest rates.
“Little by little we want them to get used to borrowing and investment when they leave our system for the state banks,” Bernard explained the philosophy behind this decision.
Sustainable livestock farming key to success
“One of the main problems with agriculture is that you need a lot of land, but to start raising chickens & eels you might only need VND2,000,000 (87USD),” Bernard added.
With that in mind, Mekong Plus began working on pig banks in the late-nineties. The plan was straightforward, beyond just microloans, sows would be given to villagers to jumpstart a livelihood in livestock farming.
Madam Hoa of Đức Linh, Bình Thuận Province is an example in rural Vietnam. She was first given two pigs which then gave birth to 19 piglets, resulting in a 55% increase of the household income after a year.
Madam Hoa from Đức Linh and her pig bank
“All we needed to do was to pay back with three piglets,” Hoa said as she smiled.
The strategy, simple and effective, allows Mekong Plus to bring forward the fruits of the project to other villagers without additional monetary burden.
Mekong Plus anticipates and adapts with disasters
The African Swine Flu has proved to be a serious problem in Indochina. The wave of Summer 2019 saw a death toll of a stunning 4.7 million pigs, leaving the market unstable and in the control of large conglomerates.
“We started thinking about other types of livestock. This was when the goats became an option,” Bernard, discussing how Mekong Plus quickly evolved to counteract the issue.
Raising goats, an alternative to raising pigs.
Goats easily reach 35 kilos in five months and require less space than pigs. Their stable market price and fear of another swine epidemic prompted many to switch to raising goats. Mekong Plus’ ‘Goat Project’ provides a microloan that is sufficient for purchasing one male and two female goats.
Tân Thành’s home in the Mekong Delta was destroyed by a devastating flood, with the family now living at a subsistence level in a makeshift home made mostly out of salvaged material. With two school-going children and only one old enough to work, he sought a solution to improve their living conditions.
Mekong Plus assisted Thanh with building a shelter for goats and a US$130 loan for the herd.
“My profits have doubled in a few months,” Thanh remarked. “We also sell that [faeces] for additional income. People use it as fertiliser.”
Tân Thành and her family are now raising goats thanks to Mekong Plus.
Today, Mekong Plus also maintains chicken and cow banks as alternatives to swine farming.
Empathy and training indispensable to the cause
Ultimately, education increases the rate of success, with Mekong Plus’ team placing emphasis on training and livestock vaccination. For example, skills training and disease control of pig herds of 735 households in Rumduol, Svay Rieng Province in Cambodia has reduced pig mortality drastically from 40% to 10%.
“When we start with a household, we spend time understanding their specific needs,” Bernard reminded. About a third of Mekong Plus’ beneficiaries are families of single mothers.
“[So] we are not just talking about loans. Showing empathy is important,” Bernard explained.
This sparked Mekong Plus to form South East Asia’s first quilting-based social enterprises in 2001, creating employment and diversifying the incomes of its beneficiaries.
Changing Trends of Microcredit in Vietnam
With mainstream organisations such as state banks and the Women’s Union offering microcredit today, Mekong Plus has reascertained its cause.
“Most of these programmes [offered by mainstream organisations] are focused on the middle income [group]. The lowest are considered very high risk borrowers,” Bernard explained.
Mekong Plus continues to focus on a range of beneficiaries that have little to no safety net; families with a budget of 1USD or less a day. An estimated 5-10% of Vietnam’s population of 98 million falls into this category.
“We are not trying to compete. We target those who simply have no access [to these schemes]. The number [of people] are even higher in regions we visit regularly.”
How you can help Mekong Plus
By 2019, Mekong Plus has consistently aided 8000 households out of poverty, with an average expenditure of US$80 per household every year. These efforts tantamount to great social investment because the reduction of poverty at each benefitting household is estimated at US$250 annually.
Unfortunately due to the pandemic, funding has become scarce. With returning waves of COVID-19, the state of poverty in Vietnam and Cambodia is worsening.
If you are keen on assisting Mekong Plus in its cause, do consider making a contribution at